Looking for a Form 2555 Templates? Download it for free!

Line 20. If you engaged in an

Housing expenses include rent, utilities

one spouse can claim the housing

unincorporated trade or business in which

(other than telephone charges), real and

exclusion or deduction.

both personal services and capital were

personal property insurance,

In figuring your housing amount

material income-producing factors, a

nonrefundable fees paid to obtain a lease,

jointly, either spouse (but not both) can

reasonable amount of compensation for

rental of furniture and accessories,

claim the housing exclusion or housing

your personal services will be considered

residential parking, and household

deduction. However, if you and your

earned income. The amount treated as

repairs. You can also include the fair

spouse have different periods of

earned income, however, cannot be more

rental value of housing provided by, or on

residence or presence, and the one with

than 30% of your share of the net profits

behalf of, your employer if you have not

the shorter period of residence or

from the trade or business after

excluded it on line 25.

presence claims the exclusion or

subtracting the deduction for one-half of

deduction, you can claim as housing

Do not include deductible interest and

self-employment tax.

expenses only the expenses for that

taxes, any amount deductible by a

shorter period. The spouse claiming the

tenant-stockholder in connection with

If capital is not an income-producing

exclusion or deduction can aggregate the

cooperative housing, the cost of buying or

factor and personal services produced the

housing expenses of both spouses,

improving a house, principal payments on

business income, the 30% rule does not

subject to the limit on housing expenses

a mortgage, or depreciation on the house.

apply. Your entire gross income is earned

(line 29b), and subtract his or her base

Also, do not include the cost of domestic

income.

housing amount.

labor, pay television, or the cost of buying

Separate foreign households. If you

furniture or accessories.

Line 25. Enter the value of meals and/or

and your spouse lived in separate foreign

lodging provided by, or on behalf of, your

Include expenses for housing only

households, you each can claim qualified

employer that is excludable from your

during periods for which:

expenses for your own household only if:

income under section 119. To be

•

The value of your housing is not

Your tax homes were not within a

excludable, the meals and lodging must

excluded from gross income under

reasonable commuting distance of each

have been provided for your employer’s

section 119 (unless you maintained a

other, and

convenience and on your employer’s

•

second foreign household as defined

Each spouse’s household was not

business premises. In addition, you must

later), and

within a reasonable commuting distance

have been required to accept the lodging

•

You meet the tax home test and either

of the other spouse’s tax home.

as a condition of your employment. If you

the bona fide residence or physical

Otherwise, only one spouse can claim

lived in a camp provided by, or on behalf

presence test.

his or her housing exclusion or deduction.

of, your employer, the camp may be

This is true even if you and your spouse

considered part of your employer’s

Second foreign household. If you

file separate returns.

business premises. See Exclusion of

maintained a separate foreign household

Meals and Lodging in Pub. 54 for details.

for your spouse and dependents at a

See Pub. 54 for additional information.

place other than your tax home because

Line 29a. Enter the city or other location

the living conditions at your tax home

Part VI

(if applicable) and the country where you

were dangerous, unhealthful, or otherwise

incurred foreign housing expenses during

adverse, you can include the expenses of

Line 28. Enter the total reasonable

the tax year only if your location is listed

the second household on line 28.

expenses paid or incurred during the tax

in the table beginning on page 5;

year by you, or on your behalf, for your

otherwise, leave this line blank.

Married couples. The following rules

foreign housing and the housing of your

Line 29b. Your housing expenses may

apply if both you and your spouse qualify

spouse and dependents if they lived with

not exceed a certain limit. The limit on

for the tax benefits of Form 2555.

you. You can also include the reasonable

housing expenses varies depending upon

expenses of a second foreign household

Same foreign household. If you and

the location in which you incur housing

(defined later). Housing expenses are

your spouse lived in the same foreign

expenses. In 2008, for most locations,

considered reasonable to the extent they

household and file a joint return, you must

this limit is $26,280 (30 percent of

are not lavish or extravagant under the

figure your housing amounts (line 33)

$87,600) if your qualifying period includes

circumstances.

jointly. If you file separate returns, only

all of 2008 (or $71.80 per day if the

number of days in your qualifying period

that fall within your 2008 tax year is less

than 366).

Limit on Housing Expenses

The table beginning on page 5 lists the

Worksheet — Line 29b

Keep for Your Records

housing expense limits based on

geographic differences in foreign housing

costs relative to housing costs in the

United States. If the location in which you

Note. If the location in which you incurred housing expenses is not listed in the table

incurred housing expenses is listed in the

beginning on page 5, and the number of days in your qualifying period that fall within the

table, or the number of days in your

2008 tax year is 366, DO NOT complete this worksheet. Instead, enter $26,280 on line 29b.

qualifying period that fall within the 2008

tax year is less than 366, use the Limit on

1. Enter the number of days in your qualifying period that fall within the

Housing Expenses Worksheet on this

2008 tax year (see the instructions for line 31) . . . . . . . . . . . . . . .

page to figure the amount to enter on line

29b. If the location in which you incurred

2. Did you enter 366 on line 1?

housing expenses is not listed in the

table, and the number of days in your

No. If the amount on line 1 is less than 366, skip line 2 and go to

qualifying period is 366, enter $26,280 on

line 3.

line 29b.

Example. For 2008, because your

Yes. Locate the amount under the column Limit on Housing

location is not listed in the table beginning

Expenses (full year) from the table beginning on page 5 for the

on page 5, your limit on housing

location in which you incurred housing expenses. This is your

expenses is $71.80 per day ($26,280

limit on housing expenses. Enter the amount here and on

divided by 366). If you file a calendar year

line 29b.

return and your qualifying period is

January 1, 2008, to September 30, 2008

STOP

Do not complete the rest of this worksheet . . . . . . . . . . . .

(274 days), you would enter $19,673 on

line 29b ($71.80 multiplied by 274 days).

3. Enter the amount under the column Limit on Housing Expenses

More than one foreign location. If

(daily) from the table beginning on page 5 for the location in which

you moved during the 2008 tax year and

you incurred housing expenses. If the location is not listed in the

incurred housing expenses in more than

table, enter $71.80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

one foreign location as a result, complete

the Limit on Housing Expenses

4. Multiply line 1 by line 3. This is your limit on housing expenses.

Worksheet on this page for each location

Enter the result here and on line 29b . . . . . . . . . . . . . . . . . . . . .

in which you incurred housing expenses,

entering the number of qualifying days

-3-

Instructions For Form 2555 - Foreign Earned Income - Internal Revenue Service - 2008 Page 3

Related Articles

Related forms

Related Categories